Overview of the Retail Industry
With the presence of well-established players, the retail industry has been experiencing a robust growth over the years. The retail sector at large comprises of commodities for household consumption and represents 31% of the global GDP. Along with the rising disposable income, a combination of factors such as urbanization, technological growth, and increasing consumer spending is contributing to the growth of the retail space. With a considerable number of retail units spread globally, China and the US are expected to lead the market in the retail sector. The retail space is expected to witness a promising growth with the presence of e-commerce platforms and several factors may hinder the growth of the market. These factors include:
Inflation: With the recent economic depression, there has been a significant rise in the oil prices which has led to an increase in the prices of household commodities. As the customer needs and expectations continue to evolve, global retailers should emphasize on meeting the relentless demands of the customers while compromising on the costs. Also, due to the inflation, the purchasing power of the customers have drastically narrowed down, which further affects the growth of the retail sector.
Engaging and retaining their talent: The lack of engagement in the food retail space is responsible for the high staff turnover in the retail, so organizations are facing pressures to reduce the attrition levels while focusing on performance. In this era of the competitive-centric environment, global retailers in the food sector should focus on retaining their best talent to adequately meet the business efficiency.
Changing customer preferences: With the advances in technologies, consumers are more informed and can choose a wide variety of products. To meet the changing demands of the customers, leading organizations are facing the need for offering products that meet the requirements of the target audiences. Moreover, organizations in the food retail space should provide affordable services while meeting the quality standards.
To combat these challenges and gain adequate insights into the spending patterns, leading food retailers are utilizing spend analysis solution. Spend analysis solutions provide better visibility into the businessand helps businesses manage organizational spend and identify critical saving opportunities in an easy manner. Spend analysis solutions also offers insights on the inventory level and helps organizations reduce the maverick spend.
The Business Challenge and Journey
A renowned client in the food retail space wanted to gain accurate, timely, and detailed visibility into the spending patterns and identify the potential saving opportunities to reduce maverick spend. The client also wanted to make faster, better, and more confident buying decisions and identify the bottlenecks in terms of savings leak, prices vary, and purchasing overlaps. With the help of spend analysis solution, the client wanted to compare the spend with that of the industry peers and gain granular insights on spending trends. The primary concern of the food retail client was to streamline their strategic sourcing plan to increase substantial cost savings.
To understand the spending patterns and cater to the specific business requirements, SpendEdge’s spend analysis experts tailored an extensive research methodology to gain a single view of the procurement spend. The research methodology comprised of qualitative and quantitative data collection procedures across prominent experts in the food retail space. The secondary research compiled information across a wide array of secondary sources such as trade shows, paid industry databases, and company presentations.
With the help of the spend analysis solution offered by SpendEdge, the food retail client was able to thoroughly consolidate and analyze the spend data and lower costs and improve organizational efficiency. Moreover, the solution also offers relevant insights on the aggregate demand for the products and optimize saving opportunities based on the sourcing strategy.
Key questions answered in this spend analysis engagement include:
With the help of the SpendEdge’s spend analysis engagement, the food retail client was able to gain complete visibility into the corporate spend. The solution helped the client monitor and improve supplier payment terms and maintain contract spend. Moreover, the solution also offered the client an opportunity to identify and drive total cost savings.